Gross Domestic Product (GDP)
Thursday’s sole economic report is arguably the single most important release that we see regularly. This would be the initial quarterly Gross Domestic Product (GDP) reading. Thursday's release is the first of three we will get for the 4th quarter. This data is so important because it is considered to be the best measurement of economic activity. The GDP itself is the total sum of all goods and services produced in the United States. Its results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. This initial reading will be followed by two revisions, each released approximately one month apart. Last quarter's first reading, which usually carries the most significance, is expected to show the economy grew at an annual rate of 2.0%. A noticeably weaker reading would be great news for the bond market, questioning the strength of our economy. That would likely fuel stock selling and a rally in bonds that should push mortgage rates lower. However, a larger than expected increase, indicating the economy was stronger than thought, will probably fuel bond selling and lead to higher mortgage rates.